Herbalife Tops Estimates; Lifts FY Outlook

(RTTNews) - Nutrition supplements company Herbalife Ltd (HLF), Wednesday reported a decline in second-quarter profit, hurt by a stronger dollar, although some robust growth in China enabled results to surpass Wall Street estimates.

The company lifted its earnings guidance for 2015, but still expects sales to slide in line with prior estimates.

Herbalife said its sales volumes were under pressure across most regions in the second quarter. But CEO Michael Johnson said he has been perceiving some improvement over the past few quarters and expects the trend to continue.

A multi-level marketing company, Herbalife has been under fire from hedge fund manager William Ackman who dubs it a pyramid scheme that will fail. Ackman's allegations have prompted federal probes against the company.

Herbalife, based in Los Angeles, California, posted quarterly net income of $82.8 million or $0.97 per share, compared with $119.5 million or $1.31 per share last year.

Excluding items, adjusted earnings for the quarter were $1.24 per share, compared with $1.55 per share in the prior year.

On average, five analysts polled by Thomson Reuters expected earnings of $1.11 per share for the quarter. Analysts' estimates typically exclude special items.

The company's sales for the quarter fell 11 percent to $1.16 billion from $1.31 billion a year ago. Five analysts had a consensus revenue estimate of $1.14 billion for the quarter.

In local currency, sales were up 1 percent, Herbalife noted.

Herbalife's worldwide volume for the quarter fell 5 percent from last year; notably North America 9 percent, Asia Pacific 15 percent and South and Central America 16 percent.

The lone gainers were China, where volumes surged 38 percent, and EMEA with 4 percent.

For the third quarter, Herbalife expects adjusted earnings of $1.00 to $1.10 per share and sales to decline 10 percent to 7 percent. Analysts currently expect earnings of $1.01 per share on sales decline of 6.90 percent.

For the full year 2015, the company now expects adjusted earnings of $4.50 to $4.70 per share, from prior guidance of $4.30 to $4.60 per share. Sales are still expected to decline 9.5% to 6.5%.

Analysts currently expect earnings of $4.51 per share on revenue decline of 8.50 percent for 2015.

The company said its guidance includes the impact of unfavorable currency, especially in Venezuela. Herbalife stock closed Wednesday at $49.10, down $1.20 or 2.39%, on a volume of 2 million shares on the NYSE.